Worldwide financial center by 2020

Shanghai on January 22 announced a set of measures that will see the city become a center of international finance by 2020.

The city aims to achieve an enhanced level of financial internationalization, improved financial service functions and an optimized business climate for the financial sector.

The plan has been approved by the State Council, the People’s Bank of China, together with the National Development and Reform Commission as well as several ministries.

By 2020, the city will become a global financial market which is dominated by yuan products and has strong financial resource allocation capabilities.

Shanghai will also strive to enhance the degree of its financial internalization and its global influence, attract more overseas investors to participate in its financial market, and expand the scale of international bond issuance as well as the trading scale of foreign exchange during the period lead-up.

The city hopes to further improve its financial service function by encouraging more direct financing, especially equity financing, and improve relevant arrangements for making cross-border yuan payments and settlements.

Also, Shanghai aims to further optimize its business climate for the financial sector, strengthen its competitiveness on the global stage, and improve its capabilities for financial supervision and risk prevention.

Xu Zhong, director of the research bureau of the central bank, said that although Shanghai ranked in fifth place in the Global Financial Centers Index last year, many gaps remain.

The Global Financial Centers Index is the world’s most authoritative comparison of the competitiveness of the world’s leading financial centers.

Xu said the variety of financial products available is not enough and the city’s financing service function needs to be further improved.

Also, more efforts should be made to attract professionals to work in Shanghai.

Shanghai needs to benchmark itself against other global financial hubs such as London.

Zheng Yang, director of the Shanghai Financial Service Office, said the city had made great headway serving the country’s financial reform and opening-up.

Shanghai has further consolidated its position as a financial center with a relatively complete financial market system.

Next, it will exert more effort to carry on the opening-up policy and stand at the very forefront of financial reforms and innovations.

Shanghai aims to become a global asset-management center by gathering a cluster of influential asset managers, as well as a service center for making cross-border investment and financing, by encouraging governments, financial institutions and enterprises of countries along the Belt and Road to issue yuan bonds in the city, Zheng added.

The city also seeks to build a financial science and technology center.

And it will endeavor to construct an international insurance center by setting up a reinsurance underwriting community and an operation platform for the Belt and Road Initiative.